PayPal Banks On Mobile Payments

In an effort to make mobile payments more mainstream and easy to use, PayPal is making a number of changes that will enhance its mobile payments offerings, the company announced at its second annual developer conference in San Francisco Wednesday.

The payments provider, a division of eBay, launched a new service called Mobile Express Checkout. With a secure, two-click checkout process from a mobile device, customers will be able to make payments faster with the ability to opt-in and stay logged in while they surf across other apps, PayPal said.

Merchants that already have Express Checkout integrated in their online stores will be able to easily deploy the technology, PayPal said. Coffee retailer Starbucks will use Mobile Express Checkout to reload Starbucks cards to iPhone and iPod Touch devices from its mobile app.

PayPal's Mobile Payments Library is also receiving added functionality by supporting preapproved, chain, and split payments. For subscription-based business models, developers will now be able to use preapproved payments as well as split and chained payments to receive a portion of buyer/seller transactions, the company said.

PayPal has also added a location-based feature to help iPhone users with the PayPal app find which businesses in their area will accept the mobile payments service. The feature is currently available in beta in the San Francisco Bay area.

VeriFone will become the first device manufacturer to collaborate with PayPal to let merchants anywhere take credit card and PayPal payments with its PAYWare mobile merchant app. Functionality from Bump Technologies integrated into the PayPal and PAYWare apps will also let merchants with online and offline presences accept payments, PayPal said.

PayPal has also partnered with development platform provider Appcelerator to help its 8 million PayPal merchants create custom mobile commerce apps with one web codebase on Apple's iOS, Google's Android, and RIM's Blackberry operating systems. The joint mobile commerce offering is expected to be available in 2011, PayPal said.

"Mobile commerce is the most significant change in retailing in the last century, and shopping will never be the same," said Osama Bedier, PayPal's VP of platform, mobile, and new ventures, in a statement. While acknowledging that PayPal has struggled in the past with mobile payments and the timing of its offerings, he said the company "is aggressively driving this change by redefining checkout on mobile devices for millions of consumers and businesses across the world."

PayPal said it expects to process more than $700 million mobile payments through its system by the end of the year.